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>> one of my favorite company, disnee, reported a beautiful quarter, the last time people sold it down to 46, 47, i told you to load the boat up. please don't stell, it is going higher. see you tomorrow! tomorrow. good evening, everyone. i'm larry kudlow. this is the "kudlow report." in a news conference today, president obama sounds a dire economic warning over the sequester he calls for yet another delay in those spending cuts. and he calls for another tax increase. now it's up to republicans to respond. remember, spending cut sequester goes into effect in 24 days on march 1st. the sequester by the way was originally the president's idea.
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let's get right to what the president said. john harwood joins us thousanow all the details. >> as you know, there are two ways to go about deficit reduction under the sequester law passed in 2011. one is the full ten year sequester. that's $1.2 trillion in budget cuts over ten years. the other is to do it piece meal. if do you it just for the rest of of the year, it would just be $85 billion. president obama said if congress can't agree with the full pack annual by march 1st, we need to do something smaller in the name of staving off damage to the economy, to consumer, and to federal workers. here's the president. >> if congress can't act immediately on a bigger package, about they can't get a bigger
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package done by the time the sequester is scheduled fto go into effect, then i believe they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until congress finds a way to replace these cuts with a smarter solution. >> now, of course the fundamental barriers separating the two sides on either a short term or long term deal is that president says it needs to be balanced as he calls it including both spending cuts and tax increases through closing loopholes. republicans say it has to be only intending cuts. and unlike the fiscal cliff where the president had the advantage, this is one where republicans have that advantage. if nothing happens, all the sequester cuts take effect although it was designed that neither party likes them. >> and john, just one quick one. when he talks about a bigger
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package, is he talking about the full $1.2 trillion of sequester which i thought was part of the law? >> yes, he's talking about a negotiated package to re34r5is the sequester with a mix of spending cuts and tax increases, things like the carried interest loophole which he's been targeting the last few days including in that super bowl interview saying it's unjustified. >> many thanks rn, john harwood. mr. obama very carefully avoids saying the word, but when the president says tax reform, he really means tax hikes. i have three words for the gop on this one. please just say no. leave the cash in private hands so the economy can grow. don't let the government drain it for redistribution. here now howard dean and kate bailey hutchinson. is president obama worming out
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of this snink he's saying i want a third of the spending cuts and then i want to make it all up with tax revenues. did i hear that right or is there something else going on here? >> you heard it right. he said more tax increases and, you know, you come up with those budget cuts and i'll look at it. really, larry, it is just not moving at all. this is a time when the president should be sitting down every single day with the leaders of congress and saying where can we come together. but the republicans have got to take a stand and say no at shom point and every time they try to, it's the sky's falling, media and everyone saying we have to do something on sequester or the sky will fall. we have to do something on the debt ceiling or the sky will fall. we have to do something on the continuing resolution or government will shut down and
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the sky will fall. where do you draw the line? we have a $16 trillion debt in this country. we've got to take a stand. >> howard dean, let me go to you on this because actually you're a tight fisted guy. if i understand it, you want the sequester to go nthrough. $85 billion this year. a little less than 2.5% of the $3.8 trillion budget. if you take out entitlements, then it becomes about a 6%, 7% or 8% cut. what's wrong with that? we're in trouble. doct why can't we do it? >> the sky will fall if you don't deal with the debt ceiling. but i think unfortunately, this is the price that we pay in the fiscal cliff deal. the democrats paid. i said at the time that i thought it was a short term victory for the democrats, but a long term victory for the republicans because we gave away our leverage on tax increases. so, sure, i have no objection to giving away the carried interest on some of the projects and loophole, but the fact is we're
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not in position to do that and i think we ought to get serious about the deficit and the best way to get serious about the deficit is go right over the cliff. the likelihood of having a real agreement between the white house and the conservative republicans is pretty close to zero. so i think we should take our medicine now. i don't think our sky are fall if we take the sequesters. i think from a democratic view, it's the only way we'll get the kind of defense cuts that we really need to get and we need to take our medicine. >> what i'm hearing is you disagree with the president and you're saying take the $85 billion now and sign on to as per the law just stop belly aching, you'll have $1.2 trillion of budget cuts over the next ten years. that's going to be law. and you're saying the president go on ahead and do it and stop belly aching. >> no, that's not what i'm saying. what i'm saying is -- it's not that i disagree with the president. it would be xwragreat if he cou come up with the solution. but that won't happen.
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we don't have the leverage anymore. the fact is we're probably going to go over the cliff. i think any deal that he could negotiate with the republicans would actually be worse from my point of view as a democrat than going over the cliff. because we're never going to get the kind of defense cuts that are envisioned in the sequester if you negotiate a deal with the republicans. >> senator hutch in-so thinson,s have dire consequences when we cut spending. in his book, we don't have dire consequences when we raise taxes. only when we cut spending. i think that's bad economics because i'd rather leave the resources in the hands of private business people, small business people and entrepreneurs. why is it great to have all of this draining of money into the government that will just redistribute it for political reasons instead of leaving it in the private sector? i don't get the dire consequences stuff. >> the fact is, larry, that we
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will not get this debt down unless we address entitlements. and you're right. if we leave mean in the private sector, people will get hired. they're not hiring how because they're seeing the constant talk of tax increases. they're looking at the looming obligations of obama care. and it's a flat unemployment rate that is almost like nobody's talking about it anymore in the administration. we have still an almost 8% unemployment. and if we don't get hold of this deficit, our economy is going to get more and more flat. so i think we've got to come to grips with the fact that we must cut spending and we must also look at entitlements or we'll never get to where we have to. >> but i would add one to that. i'm all for the spending cuts because i think smaller government is good for growth. i'd like to see tax reform. i'd like to see house wave way
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means committee drum up something, i think business tax reform both large and small companies will get lower tax rates. we need growth. we won't slam our way through this by cutting the budget. we need economic growth. that would lower the deficit and spending substantially. >> yes, we would get more revenue if more people were working and paying taxes. >> every single point above the baseline in gdp over ten years is worth $3 trillion in a lower budget deficit. that's from the cbo. go ahead, howard. >> the problem with that is it's been tried before to cut taxes and the result is if you don't cut taxes while you're cutting spending, the tax cuts aren't paid for. that's how we got in this in the first place when we had the enormous tax cut under president bush, that was never paid for. so that's 60% of the deficit
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right there. so this stuff about cutting taxes and that's going to stimulate the economy, this is supply side economics. >> it is. >> very much -- >> and it worked in the '80s under reagan and the '90s under bill clinton. >> reagan ran enormous deficits and clinton surplus. >> bill clinton cut spending with newt gingrich. not tax rates. never. >> the tax increases have happened. the tax increases have happened. that part of the balance is there. now it is time to look at the other side which is spending cuts and entitlement reform. that's what hasn't come yet. >> i have to get out. thanks very much. appreciate it. you're both great. so are house republicans prepared to put up a spending cut fight with the president some let's get t?
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let's get the gop perspective. mr. roscom, what is your response to president obama's rift today? >> well, look, this is president obama's sequester to pay for the old ket credebt ceiling deal. that being said, the president also in december last time you and i talked had a great deal to say about all these revenues that were coming in and he created the impression on the part of the american public that all of our fiscal problems were going to go away. it was all going to be great if simply those tax rates went up. well, the tax rates went up, the president now has $600 billion in new revenue. so this notion that somehow the remedy is to go back to the taxpayers and increase taxes is a complete nonstarter. the white house has to to get serious. these were just talking points that the president was pitching
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out today. we've seen no specifics that he's offered. >> why is it, peter, that sp cuts are bad for the economy, but tax increases are good for the economy? in other words, parsing through the president, he's basically saying if it you cut all this spending, $85 billion, about 2.5% of gdp, if you cut spending it's bad for the which i, but about if you increase tax receipts, that's good for the economy. i don't understand that logic. >> i'll see you the logic and raise it by saying this, this is how they approach it. so under the president's logic, there is no amount, there is no limit to which you can't spend if all this spending is good. and of course it's an absurdity. what it means is we march into a debt crisis, this white house has an intention to take us to $26 trillion in debt that has an adverse impact on the businesses in my district in suburban chicago. it will have an impact on interest rates over the long run. has an impact on small families and the act to get car loans and
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all of these other things. so we've got to have our heads in the game, hold this president's feet to the fire as it relates to spending and make sure that he's following through on the spending discipline that he celebrates. >> so just to put a wrap on this, the position on the gop in the house will be nothing in effect. just let the sequester go through in 21 days, less than a month. >> right. so the sequester is the president's sequester. it is current law. and if the president has an idea about how to change it, we would love to work with the white house, but i'm telling you what's not going to happen, taxes are not going to go up under house republicans and we'll make sure that we are living within our means. >> so march 1st, we should expect the $85 billion installment of the budget cuts. is that fair? will the gop hold the line, real spending cuts for a change? >> i think that is where all the initiative and where all the energy is going right now. this is president obama's
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sequester. the president has failed up until now to come up and offer anything specific beyond talking points and press conferences as to how he proposes to turn the sequester off. and absent that, we don't have any changes. >> many that i thinkthanks, pet. tomorrow i'll chat with eric cantor. he made a major address today at the american enterprise institute. he had across the board ideas to reinvigorate the republican party and the national economy. again, mr. cantor will join me tomorrow. next up this evening, we had a nice recovery rally in the markets today. but here's what i want to know. what effect will the sequester have on stocks? will it be as dire as some say or might it be bullish. we'll get answers. free market capitalism, the best path to prosperity. free market capitalism says shrink government spending to grow the economy.
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i'm larry kudlow. we'll be right back. all right that's a fifth-floor problem...
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so dow up almost 100 points today. stock rising beiing across the .
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brian shactman joins us with the market moves. >> yeah, we made back most of yesterday's losses. dow finishing up 99 points. just below 14,020 and some change. disney beat on the top and bottom lines. more importantly, it might make star wars spinoff movies, i know michelle caruso-cabrera wants to see that, hewlett-packard looking at a break up or not, we don't know for sure, but the possibility obviously moving the stock. 3 m boosting dividend and buy backs. almost 8% pop in the dividend and about $7.5 billion in the buy back. dell was the big story going private in a $24 billion transaction. michael dell leading the lbo after 25 years of being publicly trading. yum and mcgraw hill. yum still struggling in china.
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mhp's s&p unit getting sued by the government. green mountain and cvs probably movers for him. >> i want to ask, how big is the dell transaction? it just didnoesn't seem to havee sizzle that it once had. now that they're taking it private again, is it a big deal or small? >> it's a hardware company and not many people believe in the long term viability of hardware companies. hp might break itself up. so if they can get the ibm blueprint down, maybe there's something there. michael dell just has too much pride in the brand. >> we'll leave that there. so we've been talking budgets and taxes and politics. now i have a money politics question. is the spending cuts sequester bullish or bearish for stocks? let's well in our panel. art hogan, michelle caruso-cabre caruso-cabrera, along with mr. shactman. let me go to art.
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bullish or bearish? there's a debate. some people think the sequester will be terrible for the market, others think it would be good. >> spending cuts are spending cuts. whether we decide to make surgical spending cuts and actually start cut beiting spen or whether it's forced on us, it's a positive. no two ways around it. either way you slice it, it won't be bullish while we watch the gldrama going on in washington. but at the end of the day, we'll cut spending. >> $85 billion is the number for 2013. $3.8 trillion is the size of expected spending in 2013. why is that such a big deal? >> i asked the very same question. we spend $100 billion more per month than we bring in and they're talking about cutting spending of $85 billion over the next 11 months? that's a big deal?
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it's not at all. i would argue it's not big enough. if it were even bigger, it would be better for the markets. >> i was at a cocktail party a week ago with a very distinguished republican senator and i was urging the republican senator to stand tough and at that time spenditake the spendi cuts. you always find a reason not to do it. this particular senator is in fact for the sequester. nice looking hedge fund manager comes over and starts spending the daylights out of me saying if we go through with the spending cuts, it will destroy the stock market over 85 lousy billion dollars. do you buy that? >> i think none of it matters unless the spending cuts actually get us on a course to balance the budget and get rid of our annual deficit. right? because then it's bullish because you'll get on a track where we can truly grow. all the incremental stuff, none of it matters unless we're actually on a path people
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believe in will balance the budget. >> and most of it by the way, i know there's a defense piece, most of it is transfer payments. the defense piece, you saw the fourth quarter. most of it has no impact on gdp, business investment, housing. so what's this hull ? somehow we make progress. >> and we're winding down two very large campaigns.ull? somehow we make progress. >> and we're winding down two very large campaigns.ll? somehow we make progress. >> and we're winding down two very large campaigns.? somehow we make progress. >> and we're winding down two very large campaigns.? somehow we make progress. >> and we're winding down two very large campaigns.? somehow we make progress. >> and we're winding down two very large campaigns. so defense spending should be coming down. if there's a cut, let's do it now. and we don't even have to vote on this. the time line is already here. so we can stop the kabuki theater and just get on with that. as brian says, which is a very important piece of this, is it going to make a difference in the long run. are we on on the right trajectory, are we bending the curve down. >> so that hedge fund manager, it's so simple. listen, the more government spends, the bigger chunk of the
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economy they're taking. the less they spend, the less involved they are in the economy and the private economy can flourish more. it's so simple. the equation is so basic. i don't get it. >> i'm not going to name names. this guy is very good at what he does. he just didn't get what you just said and he's a great stock picker. extremely wealthy. >> he probably has a lot of stocks where they have practiced represent seeking from the government, they maybe get wing subsidies or maybe he's buying solar companies that will survive that desperately maybe he's got certain defense stock that's desperately wants to make sure that they'll keep bringing in the revenues. he probably has vested interests. >> i just want to say, one of your favorite presidents, bill clinton, when he came into office, spending as a share of gdp was about 21%, 21.5%. when he left office working with a republican congress, it was % 18%. p we had a terrific boom with lower spending.
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does anybody remember that? >> i find it amazing to look back at clinton. >> he was a conservative compared to president obama. >> even bush and the way he spent, just amazing that he is now looked at the beacon of light. >> because he was able to get to the center. he worked with a republican congress and got things done. >> and they shrank the government. after the war, the economy was booming. he even cut the capital gains. we'll come back. here is one more thing about the stock ride it that i really like. it's made a whole new wrath of brand new millionaires and even billionaires. robert frank is going to join us later with some good numbers on that very encouraging trend. all stations come over to mission a for a final go.
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the justice department is crashing down on s&p for their very stupid aaa ratings on highly flawed mortgage and subprime bonds. but today we learned there may be a smoking gun for s&p. also, if that is the case, s&p is in a heap of trouble. attorney general eric holder made the case himself in a news conference today. >> ratings were affected by significant conflicts of interest and s&p was driven by its desire to increase its profits and market share to favor the interests of issuers over investors. >> we will see if mr. holder and the doj has the proof.
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there may also be a political reason for this government lawsuit. we will pursue that later whether there's a smoking gun or it not. we'll be right back. ♪ get ready for a lot more of that new-plane smell. we're building the youngest, most modern fleet among the largest us airlines to ensure that you are more comfortable and connected than ever. we are becoming a new american. [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪ the all-new cadillac ats --
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it's our job to look after them.'s my job to look after it. ♪ u.s. government is suing s&p
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and its parent company mcgraw hill perhaps for as much as $5 million over its massive ratings mistakes on mortgage bonds and subprime issues. so far only s&p is being sued. while s&p's parent mcgraw hill stock dropped by 24%, moody's is also down by 20% since this news broke. let's ask two key questions right up front. first, is there a smoking gun inside s&p? or is this political pay back for s&p cutting the u.s. debt rating back in 2011? here's what the attorney for standard & poor's floyd abrams told david faber on cnbc earlier today. >> i don't think anyone knows. is it true that after the downgrade the intensity of the investigation significantly increased? yeah. i'm sure the government would say that it had nothing to do with it. we don't know why. >> but it did increase after the
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downgrade. >> yeah. >> but you don't though wt tho'. >> how could i? >> eric holder addressed that at his press conference today. >> they did what they did assessing what the credit wor y tth worthyness was of this nation. we looked at the facts, the law, the investigation that the great prosecutors and civil lawyers put together and made a determination that the filing of these lawsuits was appropriate. but they are not in any way connected. >> joining us on the phone is tom curran. let's welcome back our distinguished panel. tom, welcome. just in general, how do you see this case and was s&p giving good credit ratings on the outside to the public while badmouthing the issues on the inside? that's a key issue. >> well, i think that mr. abrams and standard & poor's pointed
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out that certain e-mails have been taken out of context over the critical years which september '94 through '07. and basically they've said, look, the government will have to show that the analysts didn't believe in what they were doing and that's going to be difficult. of course the government did file this in california, one of the states most critically hit hard by the collapse in the home market and the housing market. and there will be a trial -- they have a right to a trial by jury. would you whether they can find a sympathetic jury pool in california. can't get busted fo being stupid, but you can get busted if you're giving out aaa credit ratings on the outside but on the inside your an lis are badmouthing the issues. this business about the musical lyrics and the e-mails andlis ae badmouthing the issues. this business about the musical lyrics and the e-mails and various mucking around inside s&p, it doesn't read well. i just don't know what it means. >> well, wait, though. are we saying to important
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rating agencies that they can't engage this criticalen a analysis, they can't engage in raising good points and bad points some points? do we really want total vanilla lack of any real internal discussion and deliberation? because i don't think that would be responsible either. >> or art hogan, let me go back to this. maybe s&p got busted as the first one. a lot of people called for this disaster because they downgraded the u.s. debt and team obama has never forgotten that. is that a possibility here? >> really hard to know. the time line seems much more in line with we've gotten time to get around with this, we went after the banks, had a couple of suits. bank of america just wrapped things up last week. now it's time to look at the credit agencies. hard are because they haer beca lost one. >> but they were wrong . credit agencies made gigantic
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mistakes. they were stupid. >> the list of people that were stupid during this time frame is long and distinguished. so we'll have to wait and see. it's interesting the way they're going about it. they're invoking a rule put in place during the snl crisis in 1989 which it takes less proof. the burden of proof is a lot less to get something across the goal line. but estimates are this could be a three year process as they look into this and there is some talk of settling before this even hits. >> brian shactman, why don't they go after fannie mae and freddie mac? if i make a list of culprits for this whole disastrous housing meltdown, rating agencies near the top. banks and wall street brokers, near the top. i agree. what about fannie and freddie? at the order of the department of housing lowered credit standings constantly. they started in the mid to late '90s and they continued right through the boom. where is the subpoena for fannie
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and freddie. >> >> i don't know how that would even work. i don't know how that would actually -- >> suing for $180 billion.even . i don't know how that would actually -- >> suing for $180 billion. >> for me it comes back to if they don't go after other entities, that's one thing. but what woo they really expose the themselves to government resources if they didn't make the case? >> i think they want to look like they're looking tough on thib they can be tough on. what i find incredibly rich, was the government to blame in some cases is this the ratings agencies are monsters that were created by the government. state after state at the federal level, they all had rules that said if a pension fund is going to buy something, it better have a aaa rating by standard & poor's and/or hoodie or fitch. in other words, they were legislated into profitability. when you're legislated into profitability, when everybody has to buy your product, it doesn't have to be very good. because there's no market to correct. and so we are all shocked that
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they weren't very good at what they did. the government is shocked. barney frank himself admitted, you know what, we were part of the problem. part of dodd-frank was getting rid of all those rules that required -- >> but they had a monopoly. >> they expanded the number of companies that can now do it. >> tom, if you had -- lay a scenario out for us quickly. how is this going to work? >> well, i'll tell you, they've been -- good for standard and poor's because they stood up to immense pressure. this happened over the courses of years now and they've been threatened with criminal stuff and now it's just civil. so good for standard & poor's. this is going to go through discovery, there will be motions to dismiss. there will be motions for summary judgment. this is going to take longer than three years. >> let me ask you, does employed abrams' argument about the first amendment and the freedom of
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speech and the that this was just s&p's opinion, becaudoes t work here? >> yeah, i think it does. unless they can show that they purposely misled, because they're not attacking any specific cdo or mortgages. they're attacking did you all of this conduct because you had a conflict of interest because you really wanted the investment bank business and you weren't being honest with us when you said that you were being objective. >> i want to point out with the movement in the stock, we learned from reading about this that they couldn't settle for a billion dollar fine, right? so that's already -- i guess it would be at least a billion if they were going to settle this issue. so when it comes for what mcgraw hill will have to pay, it looks like it will have to be somewhere between one and five. >> i'm not sure about that. it depends on -- there are 16 states who have sued now and the district of columbia. so i'm shocked that gambling has
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been going on here. and that's what happened, michelle, you're right. >> michelle picked right up on the government agency. i can't end this without saying the federal reserve, why don't they sue the federal reserve in they created the monetary b bubble, the housing bubble, and when they busted the bubble, the whole thing fell apart. maybe the justice department will sue the fed. fat chance. now let's turn to something a little more optimistic. rising stocks making us all richer. most of us. wealth expert robert frank will tell us all about the new millionaires have w s who have nearly $12 trillion in new wealth. and a special justice department memo allowing unmanned drones to kill american citizens suspected of fighting along with al qaeda. we've already done this once and i suspect it won't be the last. well have a debate later this of
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at a dry cleaner, we replaced people with a machine. what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally. we've had a big stock market rally that's recovered $8 trillion in wealth and set a new record for millionaires. my kind of rally.
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don't you just love free market capitalism? robert frank joins us with all the info. >> thanks, larry. one way to look at the stock market is as a giant wealth creation machine. and it has just created a lot of wealth. the dow's run means we're at the country's all-time peak of millionaires and billionaires. about 9 millionaire households. millionaires have also regained most of their wealth. confidence is also at the highest it's been in almost two years. but while the wealth is back, the players have changed. more than a third of the top 1%ers have been replaced since 2007. that shows just how dynamic wealth has become in america. even those who stayed wealthy have a new mindset. they are investing more cautiously, keeping more money
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in cash. private equity and hard assets. they're slowly getting back into stocks. we'll see, larry, in the coming months whether this rally can keep the wealth boom going. for more on the winners and losers, go to many thanks to robert frank. art hogan, i want to ask you, it's not only the cold ivolume millionai millionaires, it's the fact that they're new. it kind of shows you when you say the top 1%, we don't even know who that is. >> and a lot of that wealth is created by companies that came public, a lot of them technology driven. the amazing thing is even when you look at that group, the way they're investing now is completely different than the way they were investing in 2007. so $2 trillion that went into bond funds and $800 million that came out of equity funds on an annual basis. just starting to see that rotation. but it's showing up in things like real estate which is great, all the toe sales which is
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great. luxury goods. but the transition from some of the folks that want to get a return of their money versus on their money hasn't 4happened ye. >> it means you to have a dynamic economy. overseas you see crony capitalism. it's a really important factor about. >> this is what distinguishes american style capitalism from other countries both in asia and if europe. and we don't ever want to lose that. i don't want to tie them down. i don't want to overregulate them and i don't want to overtax them. >> i know they talk about new millionaire, but i'll be unpopular at the table p about i still think there's a ton of average americans that rotated out and haven't been back. and you have people who held on to their 401(k)s feeling like it looks like '07 again. so i'm not as much a believer in the story as you guys are because i believe that a whole chunk of people that probably needed wealth creation didn't get it and the people that are already wealthy got a lot.
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>> if you're in the 401(k) -- >> you're back to where you were. if you take all the money you put in since then, you're basically back. >> just back. >> i mean, i just want to just be the counterweight to the conversation. >> we have something for everybody tonight. optimists and pessimists. the stock market is making people richer, but gasoline prices could be making all of u recent spike in gas price. >> consumers are spending more on gasoline in nearly 30 years. highest is the highest on record that we've seen for this time year before the national average at $3.53 has shot up 17 crepentn the mast wepast week alone. according to the u.s. energy information administration, the average household spent a little over $2900 on gasoline
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expenditures in 2012. that's about 4% of pre-tax income and the highest percentage of pretax income that was spent on gasoline expenditures on record with the exception of 2008. so now as we look at prices if they continue to climb, an average say $3.60 a gasoline through march, mark zandi says that will cost consumers an extra $10 billion in the first quarter. larry. >> thanks, sharon. brian schactman, why don't you like the story? 4% income, the highest in three decades. consumed by gasoline expenses. that that's not nothing. >> americans are used to gas between $3 and $4. and i don't think they change their habits one bit -- >> you grew up -- >> i know, it cost a nickel. but the bottom line is -- >> you walked both ways to school. >> and you made buttner the churn. >> and you played both sides of
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the football game. >> unless there is a shock to the up side or it breaks you into record, i don't think americans pay attention to it. >> is there a shock coming? that's an interesting question. >> his point is spot on. we're used to that $3 to $4 range. the other piece of this is as a country per capita, our energy use in total per person has gone down. come down significantly. so to talk about the record highs, in the '70s we used much more are energy per person because we're much more efficiently. >> drill, drill, drill. frac, frac, frac. pipeline, pipeline, pipeline. if the mideast blows up, there will be some ramifications. i get that on brent crude. about f but for us, it will be less. >> i think they're terrified in the middle east. we're going through a revolution in this country. you've covered it so well.
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i mean, it is unbelievable. so i think it's a great thing. be careful what we wish for because when that part of the world starts to lose all that revenue that they placate the masses with, they'll have to really deal with some trouble over there. but in the meantime, it's great for us for have all this energy production. >> 4% income is not nothing. >> it's not nothing. >> it's not knock. b nothing. but i'm not worried about gasoline prices, i agree. if americans to believe they're fighting alongside al qaeda in foreign nations. should there be any reservations about using unmanned drones to just take them out? foreign people helping al qaeda that used to be american citizen. that's our big debate coming up.
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it's being dubbed obama's kill list. a justice department memo first made public by nbc yesterday says drones can be used to kill american citizens if they are to believe senior operation alwaleeders of al qaeda. if there's an imminent threat of a violent attack against the u.s., clear evidence is not required to execute them. in other words, you can just go out and kill the traitor.
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here now we have katherine ward and yesterdjed babbift. the question is if you can't capture them but you know they're about to do something evil, why not take them out, why not use the drone bomb? about >> basically the administration's position is listen, we promise we will only use drones to rain death from the skies on american citizens when we're really, really, really sure they're bad guys. and that's very reassuring, but there's a reason most of these things are set up. we have due process. fifth amendment asks us to do more than justst us. >> fifth amendment, i'm all for the constitution. but if these guys leave america and join al qaeda, they're not americans anymore. i don't regard them as citizens. they are enemy combatants and
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they need to be treated like enemy combatants. >> i think that's what the raw is really. if you leave the united states and swear allegiance to a foreign power, you no longer are an american citizen and the law is pretty clear going back to the 1940s that an american citizen who becomes an -- swears allegiance to a foreign enemy loses his rights to citizenship and this really is an ugly situation. but i think you have to go ahead and do what the president is doing. i think this memo as loosely as it's written, and it goes on and on and on, touching all of the possible legal bases, i think it will stand up in court. it's not the best written thing. i have some misgivings about it, but you have to do what you have to do and it is legal. when al awlaki's father went to court to try to have his fame taken off the kill list, the judge threw the case off saying it was a political question, you can't interfere by a conduct of
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war by the president. that's the constitution. again, we may not like it, but that's the way it has to be. >> because these guys become foreign combatants, i don't think they deserve the rights of american citizens. in other words, you can't just go up to them in the middle of of the yemen desert and give them the miranda and say you have the right to remain silent, you have the right to get a lawyer. these guys are killers and they're trying to kill americans at the embassy or whatever it is they'll be doing. these are special conditions in war time. >> listen, these guys, you know, i don't want to stick up for them as being good guy, but what the administration is asking us to do is not just trust obama in this particular conflict to make good decisions. but essentially to trust, you know, all the presidents that come after him, all the occupants off the oval office t make similar good decisions. we've send who has occupied the chair. i'm not sure i feel comfortable with that.
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and frankly, if even jed has misgivings about this mem hoe, t memo, the rest of us should freak out. >> at the end of of the day, it's not the president, its eye the intel and military, is it not? if you're in war time, aren't those the key players? >> and they should be. the problem with the mem hoe is it lets any senior informed official to make that kind of decision. i have no problem delegating that decision to a warrior, a lieutenant colonel who is on the front line and knows what's going on, but you want to hand the power of life and death to january element napolitano or eric holder? i don't think so. again, i think katherine is right to an extent, we have to have somebody who is a grown up handling these things. right now i don't know there's a lot of people in the administration i would trust to make these decisions. >> that's political judgment. you b
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but the thing is if the intel knows there is an imminent threat and they can't get into capture the guy, it seems only thing left to do is to bomb them. that's the only thing left to do. >> you know, we actually make exceptions to our own kons tupgs all the time. and frankly, i think that's what would happen if it came down to a real ticking time bomb type scenario. but that isn't to say that we should institute that in law, not to that i we should have this memo which is not about that situation. this is about anyone who anyone thinks might be potentially -- >> it does say if capture feasible. all right. i have to get out. as always, thanks. americans going to al qaeda, i'd nail their butts. [ male announcer ] how can power consumption in china,
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The Kudlow Report
CNBC February 5, 2013 7:00pm-8:00pm EST

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

TOPIC FREQUENCY Us 14, S&p 11, U.s. 6, Obama 5, Dell 4, Mcgraw 4, Robert Frank 4, America 3, Frac 3, Freddie 2, Brian Shactman 2, Officemax 2, Michelle 2, John Harwood 2, Geico 2, T. Rowe 2, China 2, California 2, Larry Kudlow 2, Bill Clinton 2
Network CNBC
Duration 01:00:00
Scanned in San Francisco, CA, USA
Source Comcast Cable
Tuner Virtual Ch. 58 (CNBC)
Video Codec mpeg2video
Audio Cocec ac3
Pixel width 704
Pixel height 480
Sponsor Internet Archive
Audio/Visual sound, color

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on 2/6/2013